A unit of Pyramid Plastics Inc. of Rockford, Ill., formed a joint venture in March with proprietary injection molder Roi Plastics S de RL MI of Monterrey, Mexico.
The new venture, Pyramid Plastics de Mexico SA de CV, will operate in Roi's 20,000-square-foot plant, initially with Roi's 25 employees and 12 Toshiba and Cincinnati Milacron presses with clamping forces of 100-700 tons.
By June, ``we will put a tool shop down there as part of our buy-in,'' said Kelly Schwenk, general manager of Pyramid in Rockford.
``We are going down there to serve that marketplace'' and position the business for additional opportunities, he added.
Roi principals Ruben and Rogelio Rodriguez, who are brothers, hold an ownership interest in the new entity and will operate the business. Currently Roi molds proprietary home products such as toilet seats, water valves and water dispensers.
In late 2004, Pyramid began looking for a potential venture partner in Mexico. Company managers participated in a U.S. Commerce Department event in the Monterrey area and met with large original equipment makers in need of molding and tooling services for automotive, hardware and consumer product applications.
Pyramid retained an independent Mexican consultant who brought together Pyramid and Roi principals in January 2005. The 50-50 joint venture was formed 14 months later.
Pyramid in Rockford targets customers requiring just-in-time delivery from smaller runs.
``Typically, our customers require an estimated annual usage of less than 2 million parts, but realize value in our being able to deliver quality parts to them in a JIT manner,'' Schwenk said.
For Pyramid, the venture permits end-market diversification and ``a better chance to compete with other low-cost countries such as China when the product is to be consumed in the U.S. or Mexico,'' Schwenk said. ``We can work with [Roi] to elevate their quality standards [and] ... gradually bring in the typical Pyramid Plastics automotive customer work.''
In Rockford, Pyramid employs 55, runs 31 presses from 22-1,000 tons and had 2005 sales of $7 million. The firm is a Tier 2 auto supplier, with automotive accounting for about 40 percent of sales.
Pyramid's parent, Industrial Molds Inc. of Rockford, also operates mold makers Ferbe Tools AB of Gislaved, Sweden, and Fusion International, with plants in Shanghai and Dongguan, China. Together, Industrial Mold operations had 2005 sales of about $20 million.